For years, the financial marketplace in Dubai has been synonymous with oil, which remains the nation's most prominent, natural resource. This outdated perception is beginning to change, however, against a backdrop of sustained diversification both in terms of how Dubai's financial marketplace is structured and the economies pre-eminent revenue sources.

This evolution, when aligned with the changing geopolitical landscape and the uncertainty that this brings with it, has created innumerable opportunities for Dubai to complete its transition from emerging market to a genuine financial powerhouse. Currency trading will play a pivotal role in the nation's ability to capitalise, however, particularly with the dirham historically linked directly to the performance of the American Dollar (USD).

The Evolution of Dubai's Economy and Financial Marketplace

With this in mind, the question that remains is whether Dubai's forex market can achieve sustained and prominent growth while also remaining green and continuing to decrease its reliance on oil as a commodity? After all, not only is the dirham's growth largely dictated by the U.S. economic outlook and the performance of the greenback, but it tends to rise and fall based on the prevailing oil prices around the globe.

The recent oil price crisis has forced Dubai's leaders to diversify the nation's economy, however, particularly in light of the fact that the OPEC have implemented a production cap in order to negate the issue of oversupply (and restore prices to their previous levels). These efforts are beginning to yield results too, as while the economy is expected to slow down this year both the construction and property sectors are poised for sustainable, long-term growth.

With the burgeoning economy also having recorded growth of 4.1% in 2016 despite the oil crisis, this augers well for a greener and brighter future.

Can Forex Become a Forex Powerhouse While Also Remaining Green?

Dubai's financial marketplace has certainly bore the fruits of this evolution, with significant gains recently reported in the banking sector and the aforementioned real estate market. This has had a positive impact on both the liquidity within the financial market the levels of activity surrounding currency and share investment, as traders continue to diversify and move their money out of oil and affiliated commodities. If this trend continues, there is every chance that Dubai can emerge as a thriving, developed marketplace that remains as green as it is lucrative.

From a currency perspective, the portents are particularly promising. The Philippine peso recently plunged to more than 13.2 per dirham, for example, and this represents the lowest level so far this year. The dirham has also performed admirably against the Indian rupee and similar, emerging currencies. While some of this growth has been attributed to the robust performances of the USD, there are also signs that the dirham is establishing itself in its own right and developing an infrastructure that can support sustained increases independent of the dollar and the price of oil.

The Bottom Line: How Dubai Is Poised to Become a Sustainable Forex Powerhouse

Historically, the nation's reliance on oil meant that Dubai could never have considered becoming a financial market or forex powerhouse while also remaining green. This is no longer the case, however, as the diversification of the national economy has created an infrastructure that can support the dirham regardless of any further price declines in the oil sector.

A recent merger between two of Dubai most prominent markets (the Dubai Financial Market and the Abu Dhabi Securities Exchange) has also improved the outlook for currency traders, as this has enhanced the prevailing level of sentiment and provided crucial safeguards in volatile sectors like the foreign exchange.

Altogether, these portents seem to hint at a more sustainable future for Dubai's financial marketplace, without restricting its ability to emerge as a forex powerhouse. In order for the market for fulfil its true potential, however, the dirham must prove its ability to perform robustly and independent to the USD, as otherwise it become afflicted by the current levels of uncertainty that are continuing to grip America and other, developed economies.